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Creating Freedom Through Financial Independence


Podcast: Fees, Fees Everywhere!

September 22, 2020

In this episode…

We discuss how critical why you should pay close attention to the fees you’re paying in your financial life.

Mastering this area will make you tens of thousands of dollars richer and boost your progress towards financial independence.


Listen to the show…

(you can also download the mp3 file here)


Discussion points…

  • Dealing with the big daddy: investment fees or MERs  (02:02)
  • Is a 1% fee really that bad?  (05:04)
  • Looking at fees as a percent of investment returns  (07:05)
  • How fees affect your withdrawal rate and dividends  (09:15)
  • Real examples of how fees compound over 15 and 30 years  (11:37)
  • Dealing with the argument about high fee active funds  (14:49)
  • What about brokerage fees?  (19:05)
  • Fees on superannuation and COVID withdrawals  (23:39)
  • Dave’s rant on property management fees  (27:23)
  • When higher fees might be justified  (34:04)
  • Listener question: How to split assets between partners to optimise tax  (43:24)


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Do you have something to add to this discussion?  Share your thoughts in the comments below 🙂


11 Replies to “Podcast: Fees, Fees Everywhere!”

  1. Great podcast Dave and Pat, and thanks for linking my post!

    I don’t mind paying fees where I’m getting something worthwhile out of it, but I absolutely don’t want to be paying any more than I need to for whatever service I’m getting. And I’m very happy not to have to be dealing with property management fees!

    1. No worries mate 🙂 Happy to hear you liked it. Haha yep absolutely – higher fees are justified in some cases. To be clear, I still own one high fee active fund while being well aware of the challenge that creates to performance. It’s keeping fees within an acceptable range across the portfolio that matters most I think.

  2. Guys, regarding the debate of passive/active, i would strongly recommend to look at the work of Mike Green of Logica on the subject:
    There appears to be some large structural issues with indexation. Which in my mind favors low cost LICs that do not, in my mind, carry that systemic risk. Look for low fees, yes, but beware about passive that isn’t really passive, there is more to it than it appears to be.

    1. Thanks for sharing David. I’ve seen arguments against indexing and most of them aren’t very good to be honest. Sometimes it’s wrong assumptions, other times it’s pushing an extreme illogical case of “what if 100% of the market was indexed?” I might check out that video if I feel like burning an hour or so – better than TV 🙂

      Edit: Okay, I’m 5 minutes in and already he seems to lump active ETFs (which is a large basket) and passive total market index funds together to say ‘passive is 90% of the market’ which is not the same thing at all. Broad market index funds are still less than 50% of the market, meaning active investors (the ones who set prices) are still the overwhelming transactors in the marketplace everyday.

      Indexing obviously isn’t perfect and active management definitely is important for a healthy market, but I’m not sure there’s much to worry about. I guess we’ll see!

    2. I watched about half of the video. I think it is all hand waving and waffle without actually making a coherent argument for that position. I suggest active investors will never go away, and will always be setting security prices at the margin. If securities become significantly mis-priced, then an active investor would be able come in and make a killing, and when enough of them do so, the security price will revert to the “right” price.
      For more discussion see

  3. Dave ,have you looked at the Vanguard Australia web site regarding their Personal Investor option.
    Zero brokerage on Vanguard products, from memory around 0.2% annual fee?

    1. Hi Ahjay, yes I have. We talk about this briefly in a future episode. It’s not a bad deal for those who like Vanguard’s managed funds, but for those who buy Vanguard ETFs, there’s no benefit to opening a Personal Investor Account. Investing directly in ETFs is still going to be much cheaper.

      1. Has this now changed mate? I’m researching the Vanguard personal investor, and if I purchase only VAS through them I can’t find any fees payable, including nil brokerage buy fees ($9 to sell) Except the 0.07% VAS fee, which is payable no matter where purchased.

        1. Correct, no fees payable. But it’s also not quite the same as a normal brokerage account. Restricted in what you can invest in (or pay fees) It’s not CHESS sponsored, so could be harder to leave (as holdings aren’t held directly in your name), plus more complex if the broker/custodian goes under. Not to say it’s a huge risk, but not the same as a CHESS broker. CHESS brokers also mean your info gets pre filled with the ATO making tax easier.

  4. Dave, I really enjoyed this one. I really liked the calculators you mentioned. I think it would be great if you added to your site a calculator section (Maybe in the main black Bar) which has all of your favourites.

    Also you can reduce your letting fees futher. I discovered with my rentals that about 1/3 of the cost charged for finding a new tenants was advertising. Most of this was going to old fashion printed news papers. These fees are included when they advertise on Domain or as they are owned by newspapers. This is what I told my agent to do.
    Note they charge 2 weeks rent as a flat fee for finding new tenant, in my case $600 ($300p/w rent). Only online advertising with Use the existing description and photos. I will collect the for lease sign and put in the front yard and I will return to the agent once rented. Asking for this reduced the fee from $600 to around $400.

    1. Calculator section is a great suggestion, I’ll definitely put that on the list 🙂

      People still pay for paper ads!? We haven’t been paying for that (or street signs) on our properties for a long time (maybe never). The letting fees we used to pay were separate from advertising, so I wasn’t aware of it being how you describe it. When it comes time to advertise I’ll dig a bit deeper into what costs may apply. Cheers!

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